Cyber insurance may create false sense of security - FM Global survey

Insurance Business Magazine | August 01, 2019

Cyber insurance may create false sense of security - FM Global survey
New research by FM Global has suggested that cyber insurance may create a false sense of security among senior financial executives at some of the world’s major companies. The FM Global-commissioned study found that seven in 10 senior financial executives at the world’s largest companies believe their insurer would cover most or all of the company losses caused by a cyberattack – despite some losses being nearly impossible to insure. The poll of more than 100 chief financial officers (CFOs) and other senior financial executives showed that 45% of respondents expected their insurer to cover “most” related losses from a cyber security event, while a further 26% expected their carrier to cover “all” related losses. Most of the effects these financial executives expect to experience in a major cybersecurity breach, however, aren’t typically covered by insurance policies, said FM Global. These effects include degradation of the company’s brand/reputation (46%), increased scrutiny from the investment community (40%), decline in revenue/earnings (38%), introduction of regulatory compliance problems (35%), decline in market share (24%), and decline in share price (24%).

Spotlight

The Top Global Reinsurers Are Breaking Away From The Pack, we discuss why we still view business conditions as weak even after modest price increases in 2018 and a slightly upward trend in earnings anticipated for 2018 and 2019. We also outline that the sector’s strong enterprise risk management and robust capitalization are the main pillars for our stable outlook on the sector and for the majority of the reinsurers we rate.

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Spotlight

The Top Global Reinsurers Are Breaking Away From The Pack, we discuss why we still view business conditions as weak even after modest price increases in 2018 and a slightly upward trend in earnings anticipated for 2018 and 2019. We also outline that the sector’s strong enterprise risk management and robust capitalization are the main pillars for our stable outlook on the sector and for the majority of the reinsurers we rate.